DENVER—Ball Corp. said Wednesday it will close two U.S. aerosol container manufacturing plants and eliminate about 400 jobs by 2009 as part of a restructuring of its metal product packaging division.
Ball also plans to sell a decorative tinplate can business in Baltimore, which has about 126 employees, because corporation officials believe it would be better suited as a stand-alone company.
Ball acquired all three plants last year as part of its purchase of U.S. Can Corp. The closures will result in a net reduction of 10 production lines and consolidated operations.
The closures of the 125-employee plant in Commerce, Calif., and the 280-employee plant in Tallapoosa, Ga., will be phased in through the first quarter of 2009 as the equipment is shifted to other Ball facilities, company spokesman Scott McCarty said.
Employees will be offered the opportunity to apply for other jobs within the company or receive severance packages as outlined in union agreements or employment contracts, he said.
The Broomfield-based company will record a non-cash, after-tax charge of about $26 million in the fourth quarter as a result of the closures, said R. David Hoover, chairman, president and chief executive officer. Thee changes will result in an annualized cost savings of at least $15 million a year when completed.
“While plant closures are difficult, we have an obligation to our shareholders to improve our performance,” Hoover said in a written release. “These actions are necessary to help us do so, and we continue to review our worldwide operations to determine additional steps we can take.”
The Baltimore plant has small production runs and a wide range of smaller customers, which is not a “good long-term fit” for Ball, Hoover said.
Hoover will discuss the changes with analysts Thursday after the company released third-quarter earnings.
In October 2006, Ball closed two other plants, one in Burlington, Ontario, and another in Alliance, Ohio, that it also acquired from U.S. Can.
In addition to product package manufacturing, Ball owns Ball Aerospace & Technologies Corp.
The company made the announcement after the market closed Wednesday. Ball’s stock dipped 30 cents to $53.05 in Wednesday trading.
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